Senate starts up Toll Road hearings

State panel to hear public comment next week.

State panel to hear public comment next week.

February 09, 2006|MARTIN DeAGOSTINO Tribune Staff Writer

INDIANAPOLIS -- The Senate Appropriations Committee will hold the first of three hearings today on Gov. Mitch Daniels' highway funding plan, which hinges on a long-term lease of the Indiana Toll Road. Chairman Robert Meeks, R-LaGrange, said today's testimony will be limited to administration officials and committee questions. Meeks will reserve public testimony for Feb. 16 and plans to consider bill amendments and a committee vote the following Thursday. "I want to make sure there's time to digest everything," Meeks said, "so we don't give the appearance we're trying to rush this thing through." Two other senators from Toll Road counties also are on the committee: Joe Zakas, R-Granger, and Marvin Riegsecker, R-Goshen. Riegsecker supports the bill, while reserving the right to question and modify it. Zakas has not taken a public position. Daniels is seeking legislative authority to enter public-private partnerships to operate the Toll Road and build a new leg of Interstate 69 from Indianapolis to Evansville. Cintra-Macquarie, an international investment consortium doing business as Statewide Mobility Partners, has bid $3.85 billion to run the Toll Road for 75 years. A 103-page lease agreement, combined with comprehensive operating and maintenance standards set by the state, would govern the company's operations. Administration officials say lawmakers have every right to review and modify the authorizing legislation. But they have warned against substantive changes to the negotiated lease, especially any that affect the company's financial outlook. "They could still go through with it, but they have the right to walk away and not lose their $75 million (letter of credit)," said Charles E. Schalliol, state director of management and budget. Senate leaders acknowledged those concerns Wednesday, but they also stressed their constitutional duty to review the legislation with great care. "We think we're entitled to have a complete fresh look at it to see whether the deal is one that we approve," Sen. Luke Kenley, a Noblesville Republican who serves on Appropriations, said. The lease length has drawn significant public and legislative concern. But Schalliol said shorter terms, including the state's initial offer of 50 years, would not allow the company to maximize federal tax advantages involving depreciable assets. Tax experts have advised Schalliol that the company could fully depreciate hard assets, such as concrete and bridges, over 39 years. But he said multiple bidders also advised him that they must demonstrate operational control for the effective life of the road, which is "not a defined number of years." According to Riegsecker, the Appropriations Committee will likely focus not just on the lease terms, but also on the administration's promised distribution of lease proceeds. The authorizing legislation says that 34 percent of net proceeds, or $1.22 billion, will flow to the seven Toll Road counties. That includes $100 million for a proposed regional development authority in Elkhart, LaGrange and Steuben counties, and $150 million for a 10-year fare freeze for motorists from Toll Road counties. Riegsecker said he favors St. Joseph County's inclusion in the regional development authority, but has not gauged committee interest in an authority of any scope. He also said he prefers an income tax credit for northern Indiana motorists who pay tolls, instead of the fare freeze. The Senate passed a tax credit bill last week that Zakas wrote. Staff writer Martin DeAgostino: mdeagostino@sbtinfo.com (317) 634-1707